Iceland to overhaul online payment system after shoppers hit with multiple 'pending' charges

'I was overcharged by just under £300'

Iceland won't confirm how many customers are affected, but it's understood it could be thousands. We've had a large number of complaints from MoneySavers, and seen more online. Most follow a similar pattern.

Gary, from Romford in Essex, told us he placed an order back in April, went to edit it and was then charged for the correct total, but later realised an additional £180 – the original cost of his shop – was still pending in his bank account. Unusually, Gary says the amount held as pending wasn't released automatically and he only got it back about a month later after he contacted his bank. Gary said the same issue had actually affected his previous order too, and in total he was "overcharged by just under £300".

Meanwhile Adam tweeted: "I'm nearly £40 overdrawn because Iceland have charged me again for shopping that was already paid for, and I'm being slapped with a £20 bank charge because of it."

Here are a few more examples of tweets we've seen:

What's gone wrong?

Iceland told us this issue occurs when an online order is amended – either because you've changed your mind and are editing it, or because some of the items you've ordered aren't in stock and Iceland itself needs to make an amendment.

When shoppers place an Iceland order, the payment for their original order is 'ring-fenced' by their bank, ready for the supermarket to collect. That means the money isn't actually deducted from their account, but it is set aside to cover that payment.

Then, after their order's been amended and the total due has changed, a second, separate sum is taken. This is charged to their account – but the original amount also remains as a separate pending charge on their account until it's returned. This can typically take a few days, and during that time they're unable to spend the money which has been set aside on anything else.

What does Iceland say?

An Iceland spokesperson told us: "This is something that we're taking very seriously and we're moving as quickly as possible to improve this for our customers.

"In some cases, this may look like the money has been deducted twice. It has not. But the bank can sometimes take several days to return the ring-fenced funds.

"There is nothing we can do to change or influence the banking systems. However, we absolutely recognise that this is not acceptable for our customers. We are moving quickly as a business to completely overhaul our payment system, so that the ring-fencing of funds by the bank does not occur when a customer places an order. This will mean that in the future money is only deducted once the customer's shopping has been delivered."

Iceland told us on Wednesday 3 June, when we first contacted it about this, that the overhaul of its payment system was likely to take "a couple of weeks".

However, asked if it will reimburse bank charges for those who've gone overdrawn as a result of this issue, Iceland said: "We're not able to do this. It is the bank's decision to not release this ring-fenced amount immediately."

What can I do if I've had an extra pending charge?

If you've placed an online order with Iceland and noticed you've had one or more extra payments taken as pending, you may not need to do anything – so long as you have sufficient funds in your account to cover the next few days, pending payments should be returned automatically. But it may be worth checking your account again in a few days to be sure that's happened.

But if you need the money urgently, or if it's been a few days and the payment hasn't been returned, it's worth speaking to your bank to see if it can clear the pending charge. This has worked for some, as this tweet shows:

If you're concerned extra money has actually been taken from your account, rather than just being ring-fenced, you'll need to contact Iceland to demand a refund – you'll have to email iceland.resolutionteam@iceland.co.uk or fill out its online customer support form, as its phone lines are closed.

If you've incurred an overdraft charge as a result of this problem, unfortunately Iceland says it won't reimburse you. Yet it may still be worth contacting it to complain, explaining the situation and including evidence of the extra cost you've been left with, as you may be able to argue your case.

'Ring-fencing multiple payments can cause real cash flow problems'

Steve Nowottny, news and investigations editor at MoneySavingExpert.com, said: "A lot of Iceland shoppers are understandably very unhappy at having multiple payments ring-fenced for the same online grocery order. Having sums on their account effectively frozen in this way for a few days can cause real cash flow problems – and in some cases, shoppers say they've actually been stung with overdraft charges as a result.

"It's good to see that Iceland is now addressing the problem and sorting out its payments systems, but the supermarket's right to say that what's happened is not acceptable. And where shoppers have actually incurred overdraft charges linked to this problem, Iceland needs to rethink its approach – at the very least, it should offer to cover these charges as a goodwill gesture."